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Exemption for an interest in a foreign life insurance company

Last updated 26 May 2005

This exemption allows you to invest in a foreign life insurance company without attracting FIF taxation. [section 506]

A foreign company is considered to be engaged in life insurance business as defined in the Life Insurance Act 1995 only if:

  • the company is authorised in its country of residence to carry on life insurance business, and
  • the balance sheet of the company shows that at least 50% of the gross value of the company's assets were for use in carrying on life insurance business. [section 507]

The look-through rule

If the foreign life insurance company has an interest in a subsidiary company, the foreign life insurance company can look through to a 50% owned subsidiary. The look-through rule allows the subsidiary's assets to be looked at to decide whether the foreign life insurance company passes the 50% assets test. [subsections 507(3) to (11)]

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